KUALA LUMPUR: Malaysia's headline inflation is likely to stay between 2.0 per cent and 3.5 per cent in 2023 on the back of a strong economic recovery following the COVID-19 pandemic, according to Manulife Investment Management.
Its head of macro strategy for Asia Sue Trinh said inflation was much lower in Malaysia compared to in many parts of the world, especially the emerging markets, due to generous subsidies from the government amounting to about 3.0 per cent of the gross domestic product (GDP).
"Accordingly, we doubt that Bank Negara Malaysia is likely to be pressing a panic button really soon regarding its tightening cycle," she said at the Manulife Investment Management 2022 mid-year investment outlook virtual media briefing today.
To recap, Malaysia hiked its overnight policy rate (OPR) by 25 basis points (bps) to 2.0 per cent in May. It was after four back-to-back cuts totalling 125 bps between January and July 2020, reducing the OPR to a record low of 1.75 per cent.
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